# Jersey City Board of Education v. State of New Jersey

> New Jersey Superior Court Appellate Division · February 11, 2025

URL: https://www.frixlaw.com/law-library/cases/10797534

## Case

- **Court:** New Jersey Superior Court Appellate Division
- **Decided:** February 11, 2025
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10797534

## Opinion text

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3642-22

JERSEY CITY BOARD OF
EDUCATION and G.D.,
a minor, by his guardian ad
litem, NICOLE GOHDE,

Plaintiffs-Appellants,

v.

STATE OF NEW JERSEY, NEW
JERSEY DEPARTMENT OF
EDUCATION, DR. ANGELICA
ALLEN-MCMILLAN, in her official
capacity as Acting Commissioner of
Education, NEW JERSEY OFFICE
OF MANAGEMENT AND BUDGET,
NEW JERSEY DEPARTMENT OF
TREASURY, ELIZABETH MAHER
MUOIO, in her official capacity as
New Jersey State Treasurer, NEW
JERSEY SCHOOLS DEVELOPMENT
AUTHORITY, and MANUEL M.
DA SILVA, in his official capacity as
Interim CEO of the Schools
Development Authority,

Defendants-Respondents.
_______________________________
Argued January 22, 2025 – Decided February 11, 2025

Before Judges Firko and Augostini.

On appeal from the Superior Court of New Jersey, Law
Division, Mercer County, Docket No. L-0914-19.

David G. Sciarra argued the cause for appellants
(Genova Burns LLC, attorneys; Angelo J. Genova and
Jennifer Borek, of counsel and on the briefs; David G.
Sciarra and Celia S. Bosco, on the briefs).

Amna Toor, Deputy Attorney General, argued the cause
for respondents (Matthew J. Platkin, Attorney General,
attorney; Donna Arons, Assistant Attorney General, of
counsel; Christopher Weber, Deputy Attorney General,
and Amna Toor, on the brief).

PER CURIAM

Appellant Jersey City Board of Education (JCBOE) and a parent of a child

enrolled in one of JCBOE's public schools challenged respondents'

implementation in the Jersey City School District (the District) of the School

Funding Reform Act (SFRA), N.J.S.A. 18A:7F-43 to -71. Appellants argued

that the 2018 amendments to the SFRA, phasing out certain aid and

implementation of the SFRA prior to the amendments, were unconstitutional as

applied in Jersey City. Appellants alleged the District was not providing it s

public-school students a thorough and efficient education (T&E) as required by

our State's Constitution. N.J. Const. art. VIII, § 4, ¶ 1 (T&E). Appellants

A-3642-22
2
contend this is due to the failure of the New Jersey Department of Education

(DOE) to adequately fund the District. Appellants argue the District was unable

to raise sufficient tax revenue to cover the budget necessary to provide T&E

education, and the State refused to grant the necessary aid that JCBOE was

entitled to pursuant to the SFRA.

Respondents moved and appellants cross-moved for summary judgment.

On June 14, 2023, the court granted respondents' motion for summary judgment

and denied appellants' cross-motion for summary judgment, finding the District

had not raised sufficient funds from local taxes, DOE was not responsible for

making up the deficits in the District's budget, and appellants failed to establish

that JCBOE was not providing T&E education. We affirm.

I.

In January 2008, the Legislature enacted the SFRA. Enactment of the

SFRA followed decades of litigation over school funding. Abbott v. Burke, 199

N.J. 140 (2009) (Abbott XX). The statute is intended to fulfill the State

Constitution's mandate that the Legislature provide for the maintenance and

support of a thorough and efficient system of free public schools for children

between the ages of five and eighteen years. Id. at 144, 147-48; N.J.S.A.

18A:7F-44; see also N.J. Const. art. VIII, § 4, ¶ 1 (T&E). The SFRA created a

A-3642-22
3
"clear, unitary, enforceable statutory formula to govern appropriations for

education . . . ." N.J.S.A. 18A:7F-44(g).

The SFRA established a structure for public school funding through which

school districts fund their budgets using a combination of local property taxes

and State aid.1 Ibid. The core of the formula is the "adequacy budget," which

is designed to support the majority of educational resources needed by children

in each district. N.J.S.A. 18A:7F-51.

The adequacy budget is an estimate of what it costs each district to provide

the "comprehensive curriculum standards" (CCCS) 2 to each student according

to the district's enrollment and student characteristics. In addition to the CCCS,

N.J.S.A. 18A:7A-10 requires the Commissioner of DOE to develop and

administer a monitoring system that evaluates school districts on five key

components, known as the New Jersey Quality Single Accountability

Continuum (NJQSAC). The five areas encompassed by NJQSAC are instruction

and program, personnel, fiscal management, operations, and governance.

1
The SFRA provides for several categories of State aid. See, e.g., N.J.S.A.
18A:7F-52, -54 to -58 (providing equalization, preschool, special education,
security, transportation, and adjustment aid). "State aid" is a term that
encompasses each of these categories.
2
Eventually CCCS became known as the New Jersey Student Learning
Standards. N.J.A.C. 6A:8-1.1.
A-3642-22
4
N.J.S.A. 18A:7A-10. NJQSAC provides a mechanism for assessing the degree

to which a district is providing T&E education. Ibid. The assessment may take

into consideration a district's effectiveness over time. Ibid. The Commissioner

determines the level of oversight and assistance a district requires based on the

district's compliance with the indicators in NJQSAC. Ibid.

The adequacy budget is calculated on a per-pupil base cost that reflects

the costs of educating an elementary school student with no special needs, with

weighted adjustments to reflect the additional costs of educating middle school

students, high school students, at-risk and limited English proficiency students,

and students requiring special education. Abbott XX, 199 N.J. at 153. The DOE

uses the adequacy budget in its formula for determining the amount of each

district's State aid. See N.J.S.A. 18A:7F-51 and -53.

A primary distinction between the SFRA and older school funding

formulae is that "virtually all aid under the new formula is wealth-equalized."

Abbott v. Burke, 196 N.J. 544, 556 (2008) (Abbott XIX). This means that while

the SFRA allocates State aid to school districts, the statute "requir[es] certain

levels of funding at the local level." Abbott XX, 199 N.J. at 152. As a result,

"[e]ach district contributes to its adequacy budget an amount that is based on its

ability to raise local revenue." Abbott XIX, 196 N.J. at 556-57.

A-3642-22
5
This local portion, commonly known as the "local fair share" or "LFS," is

calculated by "indexing the [D]istrict's property wealth and aggregate income

using statewide multipliers." Id. at 557; see also N.J.S.A. 18A:7F-52(a). Each

district "must provide the lesser of either its LFS, as calculated using the SFRA's

formula, or the local share it raised in the previous year[,]" often referred to as

the "required local share." Abbott XX, 199 N.J. at 155; N.J.S.A. 18A:7F-5(b).

This is the district's minimum contribution to its annual budget.

Once the adequacy budget and LFS are calculated, DOE computes the

allocation of "equalization aid" for each district. Equalization aid is a category

of State aid to each district for general fund expenses to support the district in

meeting the cost of CCCS. N.J.S.A. 18A:7F-53. Equalization aid is calculated

by subtracting the district's LFS from its adequacy budget, provided that

equalization aid shall not be less than zero. Ibid. The SFRA also contained a

State aid growth limit, which capped the total percentage increase in State aid

that a district could receive from year to year.

The SFRA's formula reflects the legislative intention that relatively

wealthier municipalities will contribute proportionally more on a local level to

their Districts' budgets than poorer municipalities, thus enabling the State to

allocate school aid more equitably to needier districts. See N.J.S.A. 18A:7F-

A-3642-22
6
44(d). Our Supreme Court found the SFRA to be constitutional shortly after its

enactment. Abbott XX, 199 N.J. at 175.

In 2011, our Supreme Court revisited the SFRA due to funding shortages.

Abbott v. Burke, 206 N.J. 332, 370 (2011) (Abbott XXI). Although the Court

disapproved of the Legislature's failure to fully fund the SFRA formula as to

Abbott3 districts, it otherwise reaffirmed the constitutionality of the SFRA as to

all other districts, even though the State aid for those districts due under the

SFRA formula was not fully funded. Id. at 369-70.

In 2017, the Legislature took steps to address growing imbalances created

by districts that were levying local property taxes well below their respective

LFS. On July 24, 2018, the Legislature amended the SFRA with the passage of

L. 2018, c. 67 (Chapter 67), which amended the formula to calculate the required

local share. Pursuant to Chapter 67, in school years 2019-2020 through 2024-

2025, certain districts that receive decreased State aid because of changes in the

required local share are required to increase their tax levy by two percent over

the prior year. L. 2018, c. 67, § 2; N.J.S.A. 18A:7F-5(d). As a result, certain

3
See Abbott v. Burke, 119 N.J. 287, 384-85 (1990) (Abbott II) (concluding that
education provided to school children in poor communities was inadequate and
unconstitutional and mandated that State funding for these districts be equal to
that spent in the wealthiest districts in the State).
A-3642-22
7
districts are required to contribute more to fund schools through their local

levies. To make up for the anticipated reduction in State aid, Chapter 67

provided districts with new tools to raise revenue.

At the same time, the Legislature enacted L. 2018, c. 68 (Chapter 68)

(codified at N.J.S.A. 40:48C-15), which permitted a municipality with a

population greater than 200,000 to collect an employer payroll tax for general

municipal purposes at a rate of up to one percent of the employer's payroll. In

municipalities with a median household income of $55,000 or greater (such as

Jersey City), the employer payroll tax revenues were to be used exclusively for

school purposes. N.J.S.A. 40:48C-15. The Assembly Budget Committee

Statement issued June 18, 2018, with respect to Chapter 68 stated:

This bill would allow all other municipalities with a
population of at least 200,000, presently only Jersey
City, to impose and collect an employer payroll tax.

This bill would require that employer payroll tax
revenues be paid to the school district on a monthly
basis if the municipality has a median household
income of $55,000 or more. Presently, Jersey City is
the only municipality under the bill that would be both
eligible to impose an employer payroll tax and meet the
median household income threshold which triggers the
requirement to use employer payroll tax revenues for
school purposes.

A-3642-22
8
In response to the 2018 amendments, Jersey City adopted Ordinance 18 -

133 imposing a one percent employer payroll tax effective January 1, 2019. The

Jersey City payroll tax generated $30.7 million dollars in 2020; $86 million

dollars in 2021; $86 million dollars in 2022, and $65 million dollars in 2023.

Jersey City's History with Respect to T&E

In 1989, the State first took control of JCBOE because it had failed to

provide T&E education. Abbott II, 119 N.J. at 352. Thereafter, the State worked

with the District over the course of nearly two decades and conducted multiple

reviews to determine whether the District was meeting the requirements of

NJQSAC. The number of students in the District had remained static with

approximately 30,000 students between 2009 and 2021. Ultimately, in 2017,

DOE recommended a return of full control to JCBOE. The DOE's

recommendation was based on the progress the District had made in meeting the

requirements of NJQSAC, in particular in the areas of instruction and program,

the aspect of NJQSAC most closely connected to providing T&E education.

By way of example, between 2012 and 2017, the four-year graduation rate

in the District increased from 67.3% to 77.2%. The number of students in

advanced placement courses increased by 40%. Every high school in the District

was offering advanced placement courses and opportunities for students to take

A-3642-22
9
credit-bearing courses at local colleges, when in the past only a few schools had

offered those options.

With respect to scores in math and English language arts (ELA), the

District was "closing the gap" between its students and the average New Jersey

student with respect to meeting grade level expectations. 4 For example, the

percent of students meeting or exceeding grade expectations rose from 2015 to

2017. With respect to ELA, in 2015, 30% of third graders were on grade level,

and in 2017, that number was 39%; in 2015, 35% of fifth graders were on grade

level, and in 2017, that number was 48%; in 2015, 34% of seventh graders were

on grade level and in 2017, that number was 50%; in 2015, 33% of eleventh

graders were on grade level, and in 2017, that number was 49%. With respect

to math, in 2015, 29% of third graders were on grade level, and in 2017, that

number was 38%; in 2015, 25% of seventh graders were on grade level, and in

2017, that number was 30%.

In 2017, the District matched the State's average student growth percentile

scores of fifty in both math and ELA. In addition, the District's NJQSAC score

in 2017 for instruction and program was ninety.

4
The record does not include State averages for percentages of students on
grade level.
A-3642-22
10
On October 13, 2020, the DOE submitted a Highly Skilled Professional

Narrative Report which described educational progress made in the District. On

September 14, 2022, the DOE certified that Jersey City was "high performing"

on the NJQSAC.

Jersey City's History with the SFRA Funding

For the 2008-2009 school year, the first year of funding under the SFRA,

the adequacy budget for JCBOE was $473,854,172; the State contributed

$277,591,645 in equalization aid; and JCBOE contributed $86,122,268, even

though its LFS was calculated to be $196,262,527. That left a shortfall of

$111,159,233, which the State contributed in the form of adjustment aid. Thus,

for this school year, JCBOE operated at slightly above the adequacy budget

amount.

For the 2009-2010 school year the adequacy budget was $486,315,450;

the State contributed $277,385,300 in equalization aid; JCBOE's LFS was

$208,930,150; and JCBOE contributed only $93,012,048 toward its LFS,

leaving a gap of $115,918,101. The State contributed $109,947,015 in

adjustment aid, and JCBOE was below adequacy by $5,971,086.

For the 2010-2011 school year, the adequacy budget was $489,564,151;

the State contributed $264,868,928 in equalization aid; and JCBOE contributed

A-3642-22
11
$102,313,254 toward its LFS of $224,695,223. Because of a statewide reduction

in the SFRA contributions that year, JCBOE operated at under the adequacy

budget by $26,835,520.

For the 2011-2012 school year, the adequacy budget was $497,534,646;

the State contributed $270,464,463 in equalization aid; the LFS was

$227,070,183; and JCBOE contributed $104,359,519 toward its LFS, leaving a

shortfall of $122,710,664. The State contributed $115,906,457 in adjustment

aid and $125,411 in EAA. JCBOE operated at below the adequacy budget in

the amount of $6,678,796.

For the 2012-2013 school year, the adequacy budget was $491,127,159;

the State contributed $267,455,194 in equalization aid; the LFS was

$223,671,965; and JCBOE contributed $106,446,709 toward its LFS, leaving a

shortfall of $117,225,256. The State paid $115,630,805 in adjustment aid and

$125,411 in EAA. Thus, that year JCBOE was below adequacy by $1,469,040.

For the 2013-2014 school year, the adequacy budget was $517,593,230;

the State paid $271,448,973 in equalization aid; the LFS was $246,144,257; and

JCBOE contributed $108,336,848 toward its LFS, leaving a gap of

$137,807,409. The State paid $114,452,158 in adjustment aid and $15,411 in

EAA. That year, JCBOE was $23,229,840 below adequacy.

A-3642-22
12
For the 2014-2015 school year, the adequacy budget was $579,277,523;

the State paid $268,131,853 in equalization aid; JCBOE's LFS was

$311,145,670; JCBOE contributed $109,961,901 toward its LFS; and the local

levy gap was $201,183,769. The State paid $109,416,061 in adjustment aid.

JCBOE was $91,642,297 below adequacy.

For the 2015-2016 school year, the adequacy budget was $601,290,845;

the State paid $265,544,879 in equalization aid; and JCBOE's LFS was

$335,745,966. JCBOE contributed $112,161,139, leaving a gap of

$223,584,827. The State paid $110,955,488 in adjustment aid, and JCBOE was

below adequacy by $112,503,928.

For the 2016-2017 school year, the adequacy budget was $588,836,489;

the State paid $252,376,000 in equalization aid; the LFS was $336,460,489; and,

of that amount, JCBOE contributed $114,404,361. The State paid $121,040,153

in adjustment aid, and JCBOE was below adequacy by $100,890,564.

For the 2017-2018 school year, the adequacy budget was $584,758,085;

the State paid $214,496,630 in equalization aid; the LFS was $370,261,455; and

JCBOE contributed $116,692,448. The State paid $158,883,988 in adjustment

aid, and JCBOE was below adequacy by $94,559,608.

A-3642-22
13
For the 2018-2019 school year, the adequacy budget was $590,163,255;

the State paid $191,268,212 in equalization aid; the LFS was $398,895,043, and

JCBOE contributed $124,367,357 toward its LFS. The State paid $181,607,480

in adjustment aid, and JCBOE was below adequacy by $92,794,795.

Jersey City's Wealth and Property Values

Kevin Dehmer, Assistant Commissioner of Finance in DOE, certified that

according to the property tax table on the New Jersey Department of Community

Affairs' (DCA) website, in 2009, the average residential property value in Jersey

City was $93,704 while the average total property tax bill was $5,605. 5 Thus,

Jersey City's actual average school tax bill was $1,525. That same year, the

State's average residential property value was $290,502, and the State's average

total property tax bill was $7,281. The State's actual school tax bill in 2009 was

$3,869.

However, in 2018, Jersey City's average residential property value had

risen to $433,320, while the State's average property value was $316,710; yet

the average total tax bill in Jersey City was $6,445, with a school tax of only

5
Appellants agreed to Dehmer's statements regarding property values and taxes
taken from the DCA website.
A-3642-22
14
$1,559, while the State's average total property tax bill that year was $8,767,

and the State's average school levy was $4,610.

"Uncapped aid" is the amount a district should receive pursuant to the

SFRA without accounting for adjustment aid. Between the years 2009 and 2023,

the State contributed significantly more to the District than the amount of

uncapped aid calculated under the SFRA.

In addition, Jersey City's mean household income was $74,013 in 2010

and $117,709 in 2019 according to the 2019 census as reflected in the parties'

statement of undisputed material facts. However, the mean household income

in New Jersey was $90,882 in 2010, and $119,301 in 2019.

The New Jersey State Comptroller, A. Matthew Boxer, had authored a

report in 2010 regarding municipal tax abatements. The report discussed tax

abatements in Jersey City, which at that time exempted $2 billion dollars in

property from taxes. Consequently, in 2010, Jersey City was not collecting

potential taxes of $120 million dollars per year.

All State aid must be approved through legislative appropriation. The

New Jersey Constitution requires an annual balanced budget. N.J. Const. art.

VIII, § 2, ¶ 2. The State operates on a fiscal year basis that begins on July 1 and

ends on June 30. Each year in February or March, the Governor presents a

A-3642-22
15
budget message to the Legislature in which he or she presents the balances of

State funds on hand, the administration's revenue projections for the upcoming

fiscal year, and proposed spending for the upcoming fiscal year. N.J.S.A.

52:27B-20. Proposed spending on School aid is included in the Governor's

budget message. Although the Governor has the statutory authority to propose

a budget, the power to appropriate State funds is vested exclusively in the

Legislature through enactment of an Appropriation Act. See N.J. Const. art.

VIII, § 2, ¶ 2.

Within two days of the Governor's budget message, the Commissioner

must notify each school district of the amount of State aid proposed by the

Governor for the district for the upcoming fiscal year. N.J.S.A. 18A:7F-5. This

is known as an "aid notice." However, because all appropriations are subject to

legislative approval, no allocation of State aid is certain until the annual

Appropriations Act is enacted.

Chapter 67 was enacted shortly after the start of fiscal year 2019 and the

enactment of the Appropriations Act and a supplemental Appropriations Act for

that fiscal year. To address funding inequities in the short term and to transition

to Chapter 67 funding, the Legislature included provisions in the fiscal year

2019 Appropriations Act that modified the Governor's budget message for fiscal

A-3642-22
16
year 2019 with respect to State aid. See L. 2018, c. 53 (Appropriations Act)

(Chapter 53); L. 2018, c. 54 (Supplementary Appropriations Act) (Chapter 54).

In short, these Acts provide if a district's prior year State aid was less than its

uncapped aid, that district received an increase in State aid for fiscal year 2019;

and, if a district's prior year State aid was more than its uncapped aid, the district

saw a decrease in State aid for fiscal year 2019. Chapter 67 follows a similar

formula by defining a "[S]tate aid differential," which is a measure of the extent

to which a district is overfunded and underfunded. The State aid differential is

used to calculate gains and losses in State aid for the district.

Chapter 53 and 54 also require that "[a]ny reduction in State aid pursuant

to this provision shall first be deducted from the amount of adjustment aid in the

school district's March 2018 aid notice . . . ." L. 2018, c. 53 and c. 54.

Essentially, more than a decade after the SFRA's enactment, the Legislature

began phasing out the "transitional assistance" that it had provided in the form

of adjustment aid. For fiscal year 2019, the Commissioner distributed State aid

in accordance with the mandates in Chapters 53, 54 and 67.

The Litigation

On April 29, 2019, JCBOE and one of its public-school students, through

his guardian ad litem, filed a verified complaint in the Law Division challenging

A-3642-22
17
school funding in the District. The District is an Abbott district. The verified

complaint named the State of New Jersey, the DOE, Commissioner of Education

Dr. Lamont Repollet,6 the New Jersey Office of Management and Budget, the

New Jersey Department of Treasury, and State Treasurer Elizabeth Maher

Muoio, as defendants. Appellants sought a declaration that the SFRA is

unconstitutional as it denies the JCBOE with the ability to provide its students

with T&E education and injunctive relief. Following the entry of an order to

show cause, the matter was transferred to Mercer County.

On July 23, 2019, appellants filed a first amended verified complaint

adding a challenge to the constitutionality of the Educational Facilities

Construction and Financing Act (EFCFA), N.J.S.A. 18A:7G-1 to -48, and

including as additional defendants the New Jersey Schools Development

Authority and Manuel M. Da Silva, its interim Chief Executive Officer.

On September 1, 2020, appellants filed a second amended verified

complaint, the operative pleading here, substituting G.D., through his guardian

ad litem Nicole Gohde, in place of the original student plaintiff. The second

amendment verified complaint included the number of personnel, such as media

6
Repollet was ultimately substituted with Acting Commissioner Angelica
Allen-McMillan.
A-3642-22
18
and technology specialists, teachers, and guidance counselors, that were reduced

as a result of budgetary shortfalls in the District.

In March 2021, Franklin Walker, former district superintendent, was

deposed. He testified that, for the 2018-2019 school year, as a result of budget

reductions, the District cut a third grade reading recovery program as well as

math and reading coaching, teacher aides, and extended day programs. The third

grade reading recovery program involved thirty-five teachers who were giving

individual assistance to third graders who could not read. Lorenzo Richardson,

a board member with JCBOE, was also deposed in March 2021, and discussed

the dilapidation of JCBOE buildings.

Melvin L. Wyns, an expert in school funding, provided a certification on

behalf of JCBOE. According to Wyns, JCBOE received funding at its adequacy

budget level only in the first year the SFRA was implemented, and thereafter,

JCBOE public schools were funded at a level below that which is necessary to

provide T&E education.

Wyns provided information about the funding for JCBOE between the

2008-2009 and 2019-2020 school years and concluded that the adequacy budget

for JCBOE's schools increased by more than 31%, the LFS increased nearly

100%, and equalization aid decreased more than 46%. Also, according to Wyns,

A-3642-22
19
during that same period, the local levy increased by nearly 57%. However,

Wyns stated the SFRA's two-percent property tax cap had constrained the speed

at which JCBOE was able to increase its local revenue.

On July 20, 2022, respondents moved for summary judgment seeking a

ruling that the SFRA and EFCFA were constitutional as applied to Jersey City.

Appellants filed a cross-motion for summary judgment seeking a ruling that the

application of the SFRA to Jersey City was unconstitutional.

On September 26, 2022, Dr. Norma Fernandez, the Superintendent of

JCBOE, certified that the District had to reduce its provision of services as a

result of underfunding. For example, she explained the District reduced the

number of licensed clinical social workers, extension teachers, and teacher

aides; kindergarten classrooms were overcrowded; and teacher salaries were not

competitive with more affluent districts. Fernandez also stated that she was

receiving significant pushback from local officials regarding raising property

taxes.

In its forty-five-page written opinion, the court found that summary

judgment was appropriate because there were no disputed material facts, and the

only issues before the court were legal questions. The court determined that the

application of the SFRA to Jersey City was not unconstitutional. The court

A-3642-22
20
reasoned it was constitutional for the State to expect the District to contribute to

its budget, and it was not the State's responsibility to subsidize the LFS to ensure

that the District was spending an amount equal to its adequacy budget. The

court emphasized that adjustment aid under the SFRA was meant to be

temporary. The District's raising of revenue from taxes was low in relation to

its property values, which the court found had significantly increased in recent

years and were higher on average than property values in the remainder of the

State. The court noted that the amount of aid JCBOE received significantly

exceeded what it was entitled to under the SFRA.

The court determined the SFRA amendments were constitutional, and the

Legislature had provided the District with a "cushion" by implementing a payroll

tax to defray expenses while the District gradually raised its property taxes.

Finally, the court found appellants did not provide any evidence that JCBOE

students were not receiving T&E education and pointed to DOE's determination

that the District was high performing. For these reasons, the court granted

respondents' motion for summary judgment7 and denied appellants' cross-motion

7
The court dismissed JCBOE's claim regarding EFCFA, and appellants do not
appeal from that determination.
A-3642-22
21
for summary judgment. Memorializing orders were entered. This appeal

followed.

Appellants raise the following two arguments on appeal: (1) the court

erred by failing to evaluate the State's implementation of the SFRA in Jersey

City as a funding measure to remedy the longstanding violation of a T&E

education in the Abbott litigation; and (2) a remand is required to determine

whether the State has allowed deficiencies of a constitutional dimension

requiring remediation to emerge in the SFRA's implementation in Jersey City.

II.

An appellate court reviews a grant of summary judgment de novo,

"applying the same standard used by the trial court." Samolyk v. Berthe, 251

N.J. 73, 78 (2022). That standard requires the appellate court to "determine

whether 'the pleadings, depositions, answers to interrogatories and admissions

on file, together with the affidavits, if any, show that there is no genuine issue

as to any material fact challenged and that the moving party is entitled to a

judgment or order as a matter of law.'" Branch v. Cream-O-Land Dairy, 244

N.J. 567, 582 (2021) (quoting R. 4:46-2(c)). "Summary judgment should be

granted . . . 'against a party who fails to make a showing sufficient to establish

the existence of an element essential to that party's case, and on which that party

A-3642-22
22
will bear the burden of proof at trial.'" Friedman v. Martinez, 242 N.J. 449, 472

(2020) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). An

appellate court does not defer to the trial court's legal analysis or statutory

interpretation. RSI Bank v. Providence Mut. Fire Ins. Co., 234 N.J. 459, 472

(2018); Perez v. Zagami, LLC, 218 N.J. 202, 209 (2014). Issues of fact should

be determined at trial and not be decided on affidavits. Carmichael v. Bryan,

310 N.J. Super. 34, 47 (App. Div. 1998).

A.

Appellants argue that the SFRA was enacted to remedy the ongoing

violation of T&E education in Abbott districts. According to appellants, the

court ignored this fundamental constitutional objective and did not analyze the

factual record as to whether the State's implementation of the SFRA in Jersey

City remedied the continuing T&E education violations in Jersey City, as

required by Abbott XX.

Respondents counter that the State is not obligated to make up the shortfall

in the District's budget because Jersey City is under taxing. Respondents point

out that JCBOE does not dispute the State's calculation of equalization aid and

does not deny that Jersey City's property and wealth has dramatically increased

in the last decade. Respondents maintain the adequacy budget is not an indicator

A-3642-22
23
of whether T&E education is being provided because many districts are able to

provide T&E education while spending below adequacy.

We are unpersuaded by appellants' arguments. The court specifically

addressed appellants' arguments as to whether there were continuing T&E

education violations in Jersey City and determined that appellants failed to

establish that the District's students were not receiving T&E education.

Appellants claimed that certain educational programs had been cut, teacher

salaries were low, and licensed social workers were reduced in the District.

But even if all of appellants' allegations are true, in and of themselves,

those claims are not sufficient to establish that the SFRA was implemented

improperly resulting in a situation where JCBOE failed to provide T&E

education. Moreover, the 2018 DOE report emphasized the progress being made

in academics and graduation rates in the District, and in 2022, the DOE

Commissioner characterized the District as high performing on the NJQSAC.

Even though there were budget cuts resulting in loss of programs and

personnel, appellants did not provide evidence that the District failed to provide

T&E education. Our de novo review of the record reveals that the court

addressed this issue by stating that appellants provided no evidence to establish

that the District was failing to provide T&E education.

A-3642-22
24
Further, the court cited Abbott II, 119 N.J. at 313, for the notion that the

claim of a deprivation of T&E education is only viable upon a showing that

students are not being equipped for their roles as citizens and competitors in the

labor market. Instead, the court found, and we agree, that evidence in the record

established that DOE had returned full local control to JCBOE because it was

high performing on the NJQSAC, an indicator of whether the District was

providing T&E education.

Additionally, graduation rates had increased, advanced placement courses

were offered in every high school, and students were tending toward the State

average for being on grade level in math and ELA. Thus, we agree with the

conclusion of the court that evidence in the record supported a finding that

JCBOE was providing T&E education.

Appellants cite Abbott XIX, 196 N.J. at 551, and Abbott XX, 199 N.J. at

166, for the proposition that our Supreme Court imposed conditions on the future

implementation of the SFRA and required that it was only constitutional so long

as it remedied the violations that had existed in providing T&E education in

Abbott districts.

It is true that Abbott XX provided for future regulation of Abbott districts

to ensure that those districts continued to provide T&E education. 199 N.J. at

A-3642-22
25
166. However, Abbott XX also envisioned a future where each district would

raise revenue in accordance with its LFS. Ibid. In fact, long before the 2018

amendments to the SFRA, Abbott XX envisioned a phasing out of aid because

each district would raise revenue in accordance with its LFS. Ibid.

Having reviewed the record, we agree the evidence supports the court's

finding that JCBOE failed to raise sufficient revenue in accordance with its LFS,

notwithstanding the enormous change in property values in the District. In fact,

the 2018 amendments were specifically geared to districts that had failed to raise

the appropriate revenue to support their LFS. As noted, in the Assembly Budget

Committee Statement issued June 18, 2018, with respect to L. 2018, c. 68, Jersey

City was singled out as the only District in the State that was qualified, according

to the statute, to impose a payroll tax to meet its school needs. Thus, we agree

with the court's conclusion that the decreased funding in the District was directly

related to Jersey City's failure to raise the proper amounts through tax revenue

to fund its LFS, and this was not due to any deficiency in the State's

implementation of the SFRA in the District.

Appellants also cite Abbott XX, 199 N.J. at 146-47, for the proposition

that the State was only permitted to apply the SFRA formula to Abbott districts

so long as those districts were not regressing to prior conditions that existed

A-3642-22
26
when the Abbott litigation began. Appellants assert that this required the State

to fund the Abbott districts at optimal levels to remediate those past T&E

education violations. Appellants argue that, instead, Jersey City has been

underfunded since the beginning of the implementation of the SFRA.

Again, we are unpersuaded. For one thing, as noted, Abbott XX

envisioned a phasing out of aid as districts were able to begin to raise their LFS.

199 N.J. 166. And, there is absolutely no evidence in the record that JCBOE

has returned to the "deplorable conditions" that existed previously. Instead, the

evidence supports a finding that JCBOE has made significant progress in

providing T&E education. Moreover, as mentioned, Jersey City is capable of

raising revenue based on its increased property values. We reiterate, the payroll

tax legislation was specifically enacted to assist Jersey City to make up the

shortfall in raising funds to meet its LFS. In fact, the evidence supports the

finding that the payroll tax has made a substantial impact on providing revenue

for JCBOE.

Abbott XX was intended to give State aid to districts that needed transition

time to get their LFS to adequate levels. Here, property values have increased

in Jersey City beyond the State average, but the local tax revenue in that District

has not kept pace with the change in property values. Any shortfall experienced

A-3642-22
27
by the District is a result of the lack of property tax revenues, and not because

the SFRA is not properly implemented. Thus, we reject appellants' argument

that the State’s implementation of the SFRA was contrary to Abbott XX.

B.

Next, appellants argue that our Supreme Court imposed two interrelated

mandates on the State to ensure that the SFRA satisfied the constitutional

mandate to provide T&E education to New Jersey students: (1) that the State

fully fund the SFRA in the first three years; and (2) every three years thereafter

the State should perform a formal rigorous review as to whether the SFRA was

being implemented correctly. Abbott XXI, 206 N.J. at 375-76.

According to appellants, the State failed to fully fund the SFRA, and the

Supreme Court was therefore required to intercede and order it to do so in 2011.

Thereafter, appellants aver the State failed to fund the SFRA at optimal levels

from 2013 through 2020, and, as a result, the shortfall in the District's budget

significantly grew during that period. Appellants contend that this establishes

the State failed to operate the SFRA in Jersey City at an optimal level and also

failed to engage in a meaningful review of the funding. Appellants' argument is

belied by the record.

A-3642-22
28
The State provided aid to Jersey City beyond what was required in an

effort to assist the District given that it was not raising its LFS. From 2009 to

2023, the State contributed significantly more than the uncapped aid the District

was entitled to pursuant to the SFRA.

C.

Appellants also argue that the 2018 amendments to the SFRA

substantially decreased the State's responsibility to fund the adequacy budget

and this is not constitutional because the District will not be able to provide T&E

education under those circumstances. We disagree.

The 2018 amendments were passed to ensure districts received the proper

amounts and that each district would be required to raise its LFS. If Jersey City

raised the proper amount of funds in accordance with its LFS, there would be no

need for additional State aid. The State has not stopped contributing to the

adequacy budget. Rather, the State has required Jersey City to raise the proper

amount of revenue—either from property taxes or from the payroll tax—such

that the State will no longer be expected to make up the difference.

D.

Next, appellants argue that the court's decision sanctions the underfunding

of the SFRA in violation of the holding in Abbott XXI, 206 N.J. at 360. Here,

A-3642-22
29
the court's grant of summary judgment is consistent with the Legislature's

objective to fund the SFRA through a combination of State contributions and

the District's payment of its LFS. Up until now, the undisputed facts show Jersey

City has been remiss in raising funds in accordance with its LFS,

notwithstanding a significant change in property values in the District. Thus,

we are satisfied the court's decision comports with the goals of the Legislature

and goals of Abbott XXI that Jersey City should raise its LFS to provide T&E

education in the District and should no longer be permitted to rely on the State

to make up the shortfall.

III.

Finally, appellants argue that the matter should be remanded to determine

whether the State has allowed deficiencies of a constitutional dimension

requiring remediation to emerge in the SFRA's implementation in Jersey City.

Appellants argue that they made a prima facie showing of the problems inherent

in the State's implementation of the SFRA in the District. Again, we disagree.

Appellants have established that there is a shortfall in funds for the

District. However, as stated, this is not a result of a problem with the State's

implementation of the SFRA. Instead, it is a result of the District's failure to

raise the appropriate amount of funds through property taxes. At the point when

A-3642-22
30
the District raises sufficient taxes, there will be no shortfall in funds for the

District.

Appellants contend that the court did not evaluate the deficits and

deficiencies in the operation of the SFRA in Jersey City. According to

appellants, the court failed to answer the core question as to whether operational

deficiencies have emerged in Jersey City of a constitutional dimension

warranting a remand.

The court found, and we agree, that the evidence presented indicated that

JCBOE is providing T&E education because of rising test scores and improved

graduation rates. Moreover, any funding shortages are a direct result of the

District's decision not to raise the appropriate amount of property taxes.

Therefore, there is no problem with the SFRA, only a problem with the District's

compliance with its obligation to raise the amount needed for the LFS.

Appellants cite Abbott XIX, 196 N.J. at 565, and Abbott XXI, 206 N.J. at

394-95, where our Supreme Court held that the question as to whether the SFRA

was constitutional should not be decided on summary judgment, but, instead,

required development of an evidential record. Therefore, appellants maintain

that the court erred by deciding this matter on summary judgment without

developing an evidential record.

A-3642-22
31
We reiterate that the court found, and we agree, that the reason for the

shortfall of funding in Jersey City was because the District failed to raise the

correct amount through local property taxation, and not because there was a

deficiency in the operation of the SFRA in Jersey City. The parties all conceded

that the evidence introduced regarding Jersey City property values and taxation

was accurate and there were no material factual disputes. At bottom, regarding

whether operational deficiencies of a constitutional dimension have arisen in the

District, appellants failed to provide any prima facie evidence. To the contrary,

credible evidence in the record indicates that the District is progressing in its

provision of T&E education. Because there were no material factual disputes,

summary judgment was properly granted to respondents.

Appellants also argue that the court did not develop the record and solely

based its decision upon affidavits and certifications. Summary judgment should

be granted when the pleadings, depositions, answers to interrogatories and

affidavits "show that there is no genuine issue as to any material fact challenged

and that the moving party is entitled to a judgment or order as a matter of law."

R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520, 540

(1995). Here, there were no factual disputes, only legal issues, and the court

properly granted summary judgment.

A-3642-22
32
Also, according to appellants, the burden of proof to demonstrate

compliance with Abbott XX is on the State, and not on JCBOE. In support of

their argument, appellants cite Abbott XXI, 206 N.J. at 396, where our Supreme

Court stated that the burden was on the State to show that the SFRA's current

level of funding could provide for a constitutionally mandated education.

However, respondents have offered evidence that DOE found the District was

providing a T&E education, and appellants do not dispute that evidence.

At base, appellants assert their disagreement with the amount of State aid

appropriated to them by the Legislature for the fiscal years stated and the amount

of State aid they expect to receive in future years to the extent that the

Legislature continues to appropriate State aid in accordance with the SFRA, as

amended by Chapter 67. Because appellants have not alleged a viable

constitutional claim under the T&E Clause, their disagreement with the

Legislature's appropriations must be addressed to the elected branches of

government, which have the sole authority to determine how to appropriate State

funds, in the absence of a constitutional mandate.

To the extent we have not specifically addressed any of appellants'

remaining arguments, we conclude they lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

A-3642-22
33
Affirmed.

A-3642-22
34

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10797534. Public record. Not legal advice.